Updated

Updated · Bloomberg · Aug 4

API Opposes Senate Biofuels Bill Expanding E15 Sales and Granting Small Refinery Exemptions

Updated

Updated · Bloomberg · Aug 4

API Opposes Senate Biofuels Bill Expanding E15 Sales and Granting Small Refinery Exemptions

Q: If small refineries get a free pass on biofuel mandates, which major companies will be forced to absorb the multi-billion dollar difference?

The burden would fall on the refiners that do not qualify for small-refinery relief — chiefly the large integrated and major independent fuel makers that carry most Renewable Fuel Standard obligations, such as Marathon Petroleum, Valero Energy, Phillips 66, Exxon Mobil, Chevron and HF Sinclair. That is the core of API’s objection. Under the Senate draft, some small refineries would get automatic or easier exemptions from blending mandates, while EPA could require non-exempt refiners to make up the waived volumes. In practice, that means the compliance cost would be redistributed to the biggest obligated parties through higher renewable fuel blending requirements or more Renewable Identification Number, or RIN, purchases. The exact company-by-company hit is not spelled out in the bill, and EPA would still determine how any reallocation works. But the logic is clear: if exempted small refineries do not have to meet part of the mandate, the remaining obligated refiners absorb the shortfall. That is why API says the proposal could create a multi-billion-dollar transfer of compliance costs rather than reduce them. Industry reporting and EPA rule analyses suggest the biggest exposure would be among companies with large U.S. refining and marketing footprints and substantial domestic gasoline and diesel sales, because those volumes determine RFS obligations. Smaller exempt refineries would be shielded, while larger competitors would carry more of the mandate.

3 articles · Updated · Bloomberg · Aug 4

The American Petroleum Institute broke with a Senate biofuels proposal it had partly backed, saying the latest bill wrongly couples year-round E15 gasoline sales with broad small-refinery waivers.
E15 had been a priority for the oil and gas lobby in Congress this year, but API objected after senators shifted from earlier plans that would have sharply reduced refinery exemptions.
The new measure would make some exemptions from annual biofuel blending mandates essentially automatic for qualifying small refineries.
Companies denied those breaks could also be required by regulators to cover part of their competitors’ exempted blending obligations, deepening industry opposition to the bill.